The price of Bitcoin has climbed past $12,000, reaching its latest record and pushing its year-to-date (YTD) gain to more than 1,100%.
After breaking through this milestone, the digital currency’s price kept climbing, extending Bitcoin’s gains.
The cryptocurrency had risen to as much as $12,273.54 at the time of report, according to the CoinDesk Bitcoin Price Index (BPI).
At this price, Bitcoin’s YTD gain was roughly 1,167%.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Bitcoin, the world’s largest digital currency by market capitalization (market cap), has enjoyed some very robust gains this year.
As for what drove the latest gains, there are a few likely explanations.
Recently, The Chicago Board Options Exchange and exchange operator CME Group announced that they will begin offering digital currency-based futures later this month, according to CoinDesk.
Once these futures contracts are available for trading, it could draw institutional investors to Bitcoin.
This could trigger significant investments into the digital currency.
“We’re seeing a price drive based on the upcoming futures contracts,” said Jeff Koyen, strategic advisor to 360 Blockchain Inc., which invests in blockchain-based technology. “There’s a lot of new money coming in, looking for quick profit.”
Bitcoin, long the largest digital currency by market value, has been generating ever-increasing visibility.
This year, the digital asset’s rising prominence has motivated financial heavyweights like Warren Buffett, Jamie Dimon and Ray Dalio to weigh in on its future.
Digital currencies in general have been drawing significant interest this year, causing their total market cap to rise to more than $365 billion, according to CoinMarketCap.
However, Bitcoin’s share of this figure has been rising over the last six months, following an upward trend and reaching more than 56% at the time of report, additional CoinMarketCap figures show.
“Why BTC has outperformed is an interesting question, but it seems to be largely a factor of its brand and public awareness still being way out ahead of the rest,” said cryptocurrency fund manager Jacob Eliosoff.
“Even the relatively savvy financial institutions wading in now see Bitcoin as the bellwether for the industry, and allocate their capital accordingly.”
What Will Bitcoin Do Next?
As for what Bitcoin will do next, analysts have provided mixed points of view.
Several market observers have stated that Bitcoin is in a bubble and could suffer a notable correction soon enough.
However, former hedge fund manager Michael Novogratz has provided a far more bullish point of view, telling CNBC that the digital currency could reach $40,000 by the end of next year.